As the U.S. House of Representatives considers reauthorization of the Pipeline Safety Act (PSA), a House Transportation & Infrastructure Subcommittee requested input from the Department of Transportation (DOT) Office of Inspector General (OIG) on ways to enhance the enforcement of criminal pipeline safety laws under the PSA.  In a letter dated March 8, 2016, DOT Inspector General (IG) Scovel provided two recommendations: (1) that the mental state required for prosecutions under the Pipeline Safety Act be reduced from “knowingly and willfully” to “recklessly;” and (2) that the law provide for greater whistleblower incentives, such as the one recently enacted by the Fixing America’s Surface Transportation Act (FAST Act).

In his letter, the DOT IG expresses frustration in a lack of a “significant number of pipeline safety prosecutions under [PSA] Title 49 U.S.C. Section 60123(a).”  Criminal prosecutions under this section of the PSA require that the violation be committed “knowingly and willfully,” which is the highest, most stringent mental state standard among criminal statutes.  The IG points out that this standard has resulted in numerous pipeline safety cases being declined for prosecution by the U.S. Department of Justice, and many other cases not even being referred to the OIG for criminal investigation because PHMSA concluded that there is insufficient evidence to establish a criminal violation.  The IG views this lack of criminal prosecutions as a danger that pipeline operators “may treat the administrative enforcement of fines as nothing more than the cost of doing business.”

The IG recommended that the standard be reduced to “reckless” to mirror the criminal standard already used in the prosecution of violations of PHMSA’s hazardous materials transportation laws and regulations (49 U.S.C. Section 5124).  Although the “reckless” standard is typically used for criminal misdemeanors, its use as a standard for a felony prosecution is extremely rare because it is a relatively low threshold that could result in severe penalties, including imprisonment for individuals.  This would be a significant revision that would add uncertainty about criminal liability for violations of the Act. Note, however, that the existing hazardous materials criminal liability standard defines ‘reckless’ as requiring ‘deliberate indifference’ or ‘conscious disregard’ of the consequences of that person’s conduct (as acknowledged by the DOT Inspector General) which is a higher burden of proof than the common reading of ‘reckless’ may suggest.

The IG also recommended enhancing whistleblower provisions, because “employees of pipeline operators and other persons with knowledge of violations rarely come forward.”  The IG believes that DOT may not become aware of pipeline safety violations until it is too late, and that a new whistleblower incentive provision “would greatly enhance DOT’s ability to identify safety violations and take appropriate action before a pipeline rupture or explosion occurs.”  Among other things, the whistleblower provision under the FAST Act (enacted last December) provides for monetary awards (between 10-30% of the collected sanction) to whistleblowers where information they provide leads to the successful resolution of an administrative or judicial action that results in monetary sanctions over $1,000,000.

During recent PSA reauthorization hearings, the Pipeline Safety Trust likewise recommended that Congress lower the criminal liability standard.  Neither the draft legislation being considered by the House nor the Senate version of the reauthorization bill, S 2276 (approved by the Senate on March 3), currently amend any criminal provisions of pipeline safety laws or propose to add whistleblower provisions.  However, the exchange between Rep. Michael E. Capuano, the ranking member of the Subcommittee, and the DOT OIG indicate growing interest in revising the standard for criminal liability under the PSA and the possibility that the House will pick up on the IG’s recommendations in considering PSA reauthorization legislation.  We will continue to monitor proposed legislation and provide pertinent updates.